In a divorce setting, pension plans are sometimes included in the list of assets that will be distributed to the parties during the process.  The parties’ divorce pension rights are listed in a court order known as a “Qualified Domestic Relations Order”, or QDRO.  The parties’ pension plan administrator or coordinator will then be bound to follow the provisions outlined in the QDRO.   

The qualified domestic relations order outlines the division of pension plans according to the divorce decree.  QDRO’s can be prepared in a number of different ways, just as long as they conform to the requirements of state and federal laws, such as the Employment Retirement Income Security Act (ERISA).

What is Contained in a Qualified Domestic Relations Order?

In order for a qualified domestic relations order to be legally enforceable, it must contain certain pieces of information.  These requirements are outlined in sections of ERISA and various tax laws.  In order to be recognized by a pension plan administrator, the QDRO must contain:

  • The names and mailing addresses of the retirement plan participant as well as the former spouse who will be receiving distributions (known as the “alternate payee”)
  • The percentage or amount of the retirement benefits that are to be paid to the alternate payee from the plan
  • The manner by which the payment amounts will be calculated, if a percentage cannot be agreed upon or determined
  • Information regarding the particular retirement pension plan to which the order will apply

If a QDRO is already in effect, a subsequent order usually cannot alter the original order without the consent of the parties.  For example, a subsequent QDRO cannot order the administrator to make payments to a different party.

Also, the retirement plan administrator will also be subject to various requirements regarding the QDRO.  The administrator must receive notice of the QDRO, and must also accept and acknowledge their duties under the order. 

Are Qualified Domestic Relations Orders Enforceable under Law?

Yes- like any other court order or legal document, qualified domestic relations orders are enforceable under state and federal laws.  This means that a failure to follow the requirements in a QDRO can result in legal penalties for the offender, whether it is the plan participant, the alternate payee, or the plan administrator. 

Violating any court order can result in contempt charges, and/or civil liability if it causes losses to the other party.

On the other hand, it should be noted that the non-participant spouse is generally entitled to the same rights that the participant spouse has under the plan.  These may include early withdrawal options and cost-of-living adjustments.

Do I Need to Hire a Lawyer if I Have a Dispute over a QDRO?

The laws covering qualified domestic relations orders can be somewhat complex.  If you have any disputes at all over a QDRO, or need help drafting one, you may wish to contact a divorce lawyer for advice.  Your attorney can help review the QDRO, create one, and can represent you in court if further legal action is necessary.